Consolidating intercompany inventory

Let’s assume the parent company (Company A) had sales of ,000,000 during a specific period of time.

Bankers have a right to receive financial statements that are timely and accurate.How are the payables to be properly reflected on the balance sheets of both companies, etc.?Not every privately-held company has accounting staff who are trained and experienced enough to properly handle intercompany transactions.” Let’s imagine the owner of a parent company wire transfers 0,000 to a related entities bank account.Will the parent company’s staff have what it takes to ask the owner why the transfer was made?This transfer of inventory is often done without any paperwork recorded in the parent company, which has an effect of overstating inventory on the parent company and understating inventory of the related entity.